The Pantry reports increase in merchandise, fuel sales in Q1

The Pantry, which is being acquired by the Canada-based chain Alimentation Couche-Tard, reported Thursday that both merchandise and fuel sales increased at its stores compared to the same period a year ago.

Gross merchandise sales increased 3.6 percent at the Cary-based company’s stores, while merchandise profit margins also rose to 33.8 percent from 33.5 percent. The company sold 3.7 percent more fuel gallons and also improved it fuel margins.

“Our strong first quarter results reflect the continuing progress as we grew merchandise and fuel gross profit while controlling expenses,” CEO Dennis Hatchell said in a statement.

The Pantry reported net income for the quarter of $18.9 million, or 81 cents per diluted share, compared with a net loss of $5.1 million, or 23 cents per diluted share, in the first quarter of last year.

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The Pantry operates 1,509 stores in 13 states in the Southeast, primarily under the Kangaroo Express brand.

Couch-Tard reached a deal last month to acquire The Pantry for $860 million, or $36.75 per share. Including The Pantry's debt, the deal is valued at $1.7 billion.

Couche-Tard, which operates in the U.S. mostly under the Circle K brand, has 6,303 convenience stores in North America.

The company said last month it has not made a decision yet on whether it will keep the Kangaroo Express brand. It also remains unclear whether the combined company will maintain a corporate presence in the Triangle, where The Pantry now employs 250 people in Cary and 250 in Sanford.